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LexisNexis Report: 42% of UAE Firms Experience Year-on-Year Increase in Online Fraud

Across EMEA, digital channels account for 52% of overall fraud losses, surpassing physical fraud for the first time

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Staff Writer, TLR

Published on April 23, 2024, 13:42:18

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lexis nexis, digital payments, online fraud

In the UAE, 42 per cent of companies saw a surge in fraud, according to a recent survey.

The LexisNexis True Cost of Fraud Study – Europe, Middle East and Africa revealed that UAE organisations faced an average cost of Dh4.19 (Dh3.62 for retailers and Dh4.99 for financial institutions) for each dirham lost to fraud.

This includes financial losses, labour costs, external expenses, interest, fees and replacement of stolen merchandise.

LexisNexis Risk Solutions released findings from its 2023 report, based on a Forrester Consulting survey. Businesses in Europe, the Middle East and Africa now bear fraud costs 3.90 times the value lost in fraudulent transactions.

Digital payments' rapid adoption enhances payment experiences but exposes systems to more fraud. Across EMEA, digital channels account for 52 per cent of fraud losses, exceeding physical fraud for the first time.

Cybercriminals exploit digital anonymity for fast, untraceable fraud. Scams and technologies like AI aid criminals, expanding their ability to exploit consumers and businesses.

The study reflects evolving criminal tactics. Over half (52 per cent) of EMEA businesses see synthetic identities as the main challenge in customer identity verification. Fraud remains a widespread issue, straining financial resources, operational efficiency, customer trust, and reputation.

Jason Lane-Sellers, LexisNexis Risk Solutions director for EMEA fraud and identity, stressed the escalating risk of financial losses. Fraud requires a multi-layered approach across the customer journey.

Key Findings

Fraud's Commercial Impact: Fraud impacts customer satisfaction (92 per cent in UAE vs. 75 per cent in EMEA) and conversion rates (96 per cent in UAE vs. 71 per cent in EMEA).

UAE shows heightened sensitivity to customer experience, where any fraud impact or prevention method affects satisfaction and company performance.

Evolving Fraud Management: Criminals innovate constantly, exploiting new payment methods and targeting identity theft, scams and digital wallet fraud.
Moving Forward: Organisations must adopt forward-thinking fraud management and authentication solutions, leveraging technologies like AI, machine learning, biometrics, and behaviour-based authentication.

The report surveyed 1,845 global fraud management decision-makers at financial institutions and retail companies, including 55 in the UAE, over 12 months. It provides insights into fraud's current state and challenges in digital payments in emerging markets.

For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004Follow The Law Reporters on WhatsApp Channels.

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